Skip to main content

The Globe and Mail

Tesoro to buy BP refinery, Arco retail for $2.5-billion

In this May 3, 2010 photo, the BP Helios House, the first BP ARCO's first solar-powered gas station, is seen on in Los Angeles.

Damian Dovarganes/The Associated Press

Tesoro Corp. said it would buy BP PLC's refinery in Carson, Calif., and related assets for about $2.5-billion.

Independent refiner Tesoro said on Monday that it would pay $1.18-billion for BP's refining and marketing business in Southern California, plus the value of the refinery's inventory at the time of closing. At current prices, the inventory is valued at about $1.3-billion.

The 266,000-barrel-per-day, high complexity refinery is located south of Los Angeles. The deal also includes a retail marketing network of about 800 dealer-operated gas stations, ownership of BP's Arco brand, 51 per cent ownership in a company-operated 400 megawatt cogeneration facility, and other assets.

Story continues below advertisement

Tesoro, which expects the deal to close before mid-2013, said it planned to pay for the purchase with debt and cash generated by dropping some of the assets to its master limited partnership, Tesoro Logistics LP.

BP had said in late July that it was in advanced talks on the sale of the Carson plant, as well as its Texas City, Tex., refinery.

BP announced in February, 2011, that it would sell the refineries by the end of 2012 as the company reorients its U.S. refining operations to take advantage of Canadian crude supplies.

BP's North American products division, which oversees its U.S. refineries, will wrap up a three-year probation term this month stemming from the 2005 explosion that killed 15 people and injured many more.

Report an error

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨